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The stock price of Bravo Corp. is currently $100. The stock price a year from now...

The stock price of Bravo Corp. is currently $100. The stock price a year from now will be either $160 or $60 with equal probabilities. The interest rate at which investors invest in riskless assets at is 6%. Using the binomial OPM, the value of a put option with an exercise price of $135 and an expiration date one year from now should be worth __________ today.

Please provide the steps for getting ans: 38.21

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Answer #1

Passible prices 6o. Therefore,/o up= 60°/ % . Risk Free Rate=Ye 6 160 et up movement be P Y babil Price Strike Brice Expecte

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